FG woos investors with waivers on affordable housing.

Apparently worried by the high cost of housing delivery in Nigeria, the Federal Government has begun to woo key players and stakeholders in the public and private sectors of the economy with concessions and waivers that would enable them provide affordable housing to millions of homeless Nigerians.

Indications to this effect emerged last week at one-day pre- summit for the proposed Housing and Construction Summit/Expo slated for January, 2015. The initiative is a collaborative effort between the Federal Ministry of Lands, Housing and Urban development and the Federal Ministry of Finance.

Speaking at the workshop, the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala affirmed the determination of the Federal Government to address the peculiar housing problems in the country through the provision of sector-specific incentives which have helped to create a number of identifiable opportunities in housing and construction.

”I will share with you some of these incentives, and they are open for both local and foreign investors. Firstly, investments in real estate enjoy pioneer status, hence five to seven years’ tax holidays. Secondly, investments in real estate enjoy capital allowance as well as 100 percent profit and capital repatriation guarantees. “Thirdly, research and development in building materials, as well as their commercialization attract tax deduction of 120 percent and 20 percent investment tax credit,” she said

Okonjo-Iweala charged stakeholders in the industry to come together to build a formidable sector that would reduce peoples’ hardship, while searching for shelter.

In her remarks, the Minister of Lands, Housing and Urban Development, Mrs Akon Eyakenyi noted that to build a house in Nigeria is a very expensive task due to the high cost of building materials, prevalence of unskilled labor, unnecessary bureaucratic bottlenecks and high cost of provision of enabling infrastructure.

Her words: “Affordable housing cannot be achieved without a drastic reduction in the cost of housing construction and other associated costs which invariably determine the selling price. Consequently, for affordability to thrive, emphasis must shift to reducing the cost of housing construction in order to promote access to affordable homes to the vulnerable segment of our national population”.

It was the Minister’s candid opinion that affordable housing delivery for the low and middle income earners cannot be achieved without the support of Government and the provision of incentives to encourage the participation of the private sector”.

According to her, this scenario has brought to the fore, the call in many quarters for the intervention of Government in the forms of concessions and waivers, especially on building materials as well as the establishment of factories for the production of building materials by offering incentives to investors and building materials manufacturers.

She described the need to provide affordable homes for 167 million Nigerians as an arduous task that cannot be left for the Government alone, especially now that the Government’s revenue is dwindling.

The Minister called on all stakeholders to partner with the Government to actualise the vision of Mr. President that all Nigerians deserve to be adequately housed. She also appealed to the organised private sector, manufacturing outfits, finance houses and multilateral agencies to support the proposed Housing and Construction Summit/Expo 2015 by providing financial, technical and material support to make it a huge success.

“It is our expectation that the 2015 Summit will evolve a National plan of action that will be acceptable and implemented by all tiers of Government, as well as other key partners and stakeholders, after it has been adopted consensually,” she said.

The Minister said the pre summit was packaged to “present a platform for key players and stakeholders in the private and public sectors of the economy in the housing delivery chain to discuss the challenges and issues militating against the provision of affordable housing in Nigeria”.

She explained that the pre-summit will also provide an excellent opportunity for key stakeholders and partners in the building and construction industry in Nigeria to brainstorm and agree on the concessions and waivers that will be provided by the private and public sectors to enable all Nigerians have access to affordable housing.

“It is also expected that environmentally-friendly new building technologies and solutions which are suitable for adaptation for the provision of affordable mass housing in Nigeria will be explored at this Summit in addition to other viable financial and non-financial incentives which may need to be canvassed in order to ensure the revitalization of the housing and urban development sector as a key sector for ensuring inclusive and beneficial growth,” she said.

One comment

The Concessions are good but the major challenges we face regarding affordability of housing are:

Cumbersome and High cost of land authentication processes.
High cost of land owing to the high cost of land authentication processes.
High cost of building materials.
High cost of transportation of building materials to construction site.
Lengthy duration in the construction of houses.
Shortage of adequate mortgage facilities.
High interest rates on loans for construction of housing.
If these can be addressed then, individuals will be able to afford homes without full dependence on the government, financial institutions and private corporations.